Seoul shares rise to 2-wk high on back of China's reform pledge

Mon Nov 18, 2013 9:27pm EST

* KOSPI outperforms regional markets

* Main index on track for a 4th straight winning session

* Foreign investors buy cyclicals to buttress the main index

SEOUL, Nov 19 (Reuters) - Seoul shares rose to their highest level in two-weeks on Tuesday morning, as investors took heart at the economic reforms promised in China, South Korea's biggest export market.

The Korea Composite Stock Price Index (KOSPI) was up 1 percent at 2,030.65 points as of 0200 GMT after earlier hitting 2,033.91, its best level since Nov.4.

"China's reform pledge was sexier than perceived, bringing risk back into play in emerging markets including South Korea which is still comparably low valued," said Kim Yong-goo, a market analyst at Samsung Securities.

China unwrapped its boldest reforms in decades on late Friday, pledging to let the market play a "decisive" role in the economy.

Offshore investors purchased a net 167.4 billion won ($158.23 million) worth of shares in the morning after offloading a net 11 billion won in the previous session.

Foreigners picked up cyclicals, with automakers Hyundai Motor Co and Kia Motors Corp rising 2.4 percent and 3.3 percent, respectively, while affiliate Hyundai Mobis Co Ltd advanced 3.4 percent.

Shipbuilders and chemicals were also favoured due to expectations of improved earnings, with Samsung Heavy Industries Co Ltd and LG Chem Ltd rising 4.1 percent and 2.3 percent, respectively.

Financials joined the ascent as Shinhan Financial Group Co Ltd rose 2.1 percent while Hana Financial Group Inc gained 1.9 percent.

Samsung SDI Co Ltd fell 3.2 percent in reaction to a report by Edaily, a South Korean online business news service, that quoted an official of electric carmaker Tesla Motors Inc saying it would take a few years for the two companies to strike a deal for supplying secondary batteries.

Gaining shares outnumbered decliners 395 to 383.

The KOSPI 200 benchmark of core stocks was up 1 percent, while the junior KOSDAQ edged 0.5 percent lower.